From strength to strength
ASX-listed exploration and development company Sabre Resources holds highly prospective base metals projects in northern Namibia that benefit from an exceptionally rich supply of existing infrastructure.
Since its founding in Western Australia in the late 1980s, junior explorer Sabre Resources (ASX: SBR, ‘Sabre’) has dabbled in a number of commodities. In recent times the company prospected for gold in Australia, but after looking at the global markets decided both its target country and commodity had to change.
“We found that gold wasn’t the flavour of the month any more, and it was very hard to get funding,” remarks Sabre Resources Chief Executive Tim Putt. “We began looking at uranium and base metals, and then one of our directors with experience in Namibia asked if we’d considered looking there.
“In a stroke of luck, it was around that time that the entire Otavi Mountain Land (OML) in northern Namibia became vacant,” he continues. “Our largest shareholder is a prospecting company,and it had pegged a number of prospective leases in the area.”
Finding its feet
The first lease Sabre acquired was EPL 3542, an area in the middle of the OML that was highly prospective for lead and zinc. It contained a historical deposit named Border, said to contain 30 million tonnes (Mt) at around 3-5% combined lead-zinc, which went down 300 metres. Sabre did some work on this deposit, exploring it down to about 150 metres, and delivered a JORC resource of 16Mt at around 2.1% combined lead-zinc. It was a good result, but not quite good enough to develop at that time.
“We took the deposit through scoping, did the metallurgical test work and figured out what sorts of costs setting up an operation would accrue – and the cost was not too much higher than the current lead-zinc prices,” Putt explains.
“It is certainly worthy of following up. We also believe there’s a lot more lead-zinc to be found in that tenement – the sweet spot would probably be around 20Mt of reserves, whereas at the moment the deposit converts into about 8Mt of reserve. But current low lead-zinc prices led us to change our focus to copper.”
Sabre didn’t need to go far to begin its search for copper. In late June 2012 it acquired the EPL 3540 lease, adjacent and to the south of EPL 3542, increasing the total area of its tenements in the OML to more than 800km2. This second lease surrounds the copper mine belonging to Kombat Copper (TSX-V: KBT), which although currently on care and maintenance has historically produced 8.7Mt of copper at an average grade of 3.3%.
“We were met with immediate success as we began exploring the new lease, particularly at the Guchab Mining Centre that is just 10km along strike from the Kombat Copper mine,” says Putt. “From that point onwards, certainly technically, we have gone from strength to strength.”
The Otavi Mountain Land
Namibia was certainly a big change from Australia, but still a “very good” place to do mining in Putt’s view. “Even through its transition into an independent country, Namibia retained a very strong mining culture,” he says. For examples of successful Namibian mines, Putt points to the operations of Namdeb Diamond Corporation, a 50/50 joint venture between De Beers and the Namibian Government, and to Rio Tinto’s Rössing uranium mine, which has produced more uranium than any other in the world.
The OML area in particular has hosted mining activity since the mid-1800s and encompasses a number of high-value mineral deposits, including those at the Tsumeb mine (more than 25Mt at 5% copper) and the Berg Aukas mine (more than 3Mt at 17% zinc). The OML’s history gives Sabre’s project a number of competitive advantages.
“What really appeals to us in the OML is the entrenched mining culture,” Putt comments. “You have many skilled mining personnel in the area, you have reticulated power throughout, you have good access to water, and you have roads and rail to port because of the Tsumeb smelter owned by Dundee Precious Metals. This is one of only five operating copper smelters in Africa, so having it virtually on our doorstep is a huge advantage.
“Where a lot of African projects struggle in regards to infrastructure, we have a plethora of infrastructure, which is fantastic.”
According to Putt, the Guchab target is “shaping up to be one of the most significant discoveries made in the OML in the last 50 years”. Sabre has an exploration target on it of 5-10Mt at 1-3% copper, and has spent much of the past 12 months drilling there.
“Our first result from Guchab was an intersection of more than 100 metres at over 1% copper,” says Putt.
“We’re now drilling the deposit at a long strike: so far it is 400 metres long, averaging 20 to 40 metres wide, and we’ve drilled it down to just below 100m. We also want to explore potential parallel systems within the area, especially because Guchab is only 10km along strike from the Kombat mine and thus far we’ve only explored a very small area of it.”
Sabre’s exploration programme is well funded. After raising A$10.3 million in August 2012, the company has been spending around $1 million per quarter and still has more than $4 million at its disposal.
Heading into 2014
Sabre aims to release the Maiden JORC Resource for Guchab in the first half of 2014, after which it will continue to explore within the Guchab Mining Centre. “Basically we’re looking to build resources and move towards a scoping study, so that we can work out what we need to get into production,” says Putt.
He says Sabre has “great belief in the copper market over the coming years,” so will continue to focus on copper for the foreseeable future. Simultaneously, Putt and the rest of the team are “very mindful” that they have lead and zinc assets at an advanced stage that require further work.
“We have talked to various parties about potential paths to production for our lead-zinc projects, and there are certainly a lot of opportunities to do something productive with them,” says Putt.
“They’re something we’ll keep going in the background until the right opportunity comes up to do something that adds reasonable shareholder value to them.”
He adds that the company has an open mind regarding opportunities in other projects and other commodities but, in its current strong position, sees no reason to diverge from its current course.
“Given our cash position and the success we’ve had from an exploration point of view, we’re staying focused on Namibia,” says Putt.
“With a land holding exceeding 800 square kilometres and a number of exciting prospects that have only received cursory exploration, I’d say we’ve pretty much got our hands full.”